Revisiting the Future for Dividends

We weren't planning to revisit the future for the S&P 500's dividends quite so soon, but ExxonMobil's move to boost their cash dividend payments per share by 21% to reclaim the title of being the S&P 500's biggest dividend payer forced our hand! But that wasn't the only big change, as oil-giant Chevron also announced that it would boost its own cash dividend payments by 11%.
Our first chart shows how the future for the amount of dividends expected to be paid out in the twelve months before the dividend futures contracts for indicated quarters end has changed as a result of ExxonMobil's and Chevron's announcements: Unlike Apple, who instantly became the second biggest payer of dividends in the S&P 500 index after AT&T when the company announced it would reinstate its long dormant dividend payments, the combination of third-ranked ExxonMobil's 21% increase to move into the top spot with Chevron's smaller 11% increase had a much smaller effect on the market-capitalization weighted cash dividends per share for the S&P 500. For those who like to see what's in the future for the S&P 500 index as a result of these changes, here's our chart showing the change in the rates of growth of both the S&P 500's average monthly index value and its expected dividends per share: An objective reading of the chart indicates two changes affecting stock prices in the relative absence of noise: one in the very near short term as investors adapt to their just changed expectations for dividend payments that has shifted the future from where it was, and the other playing out in the longer term given their overall expectations for the future. We'll close by noting that investors appear to remain focused on the fourth quarter of 2012 in setting the average level of stock prices for the S&P 500.

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By Ironman at Political Calculations: We weren't planning to revisit the future for the S&P 500's dividends quite so soon, but ExxonMobil's (XOM) move to boost their cash dividend payments per share by 21% to reclaim the title of bein

Back in the days of the Soviet Union, there was a whole field within political science known as "Kremlinology", where people outside the ruling circle within the Kremlin would attempt to divine what was really going on in that nation from what little information the country's bosses made public in the media they controlled.

In the absence of new, noise-driven events, we can expect that the average of stock prices in the United States as measured by the S&P 500 will rise to a level between 1182 and 1218 in the very near future, with 1200 marking the midpoint of our forecast range.

Once again, in the relative absence of noise that might drive stock prices off from where investors would otherwise set them, stock prices for the S&P 500 converged with the level of expectations for dividends in the first quarter of 2014:

Thanks to the diminished level of noise in the stock market, stock prices continued to behave exactly as expected in the week ending Friday, 25 October 2013, with the S&P 500 rising by 15.27 points to close at at new all-time record high of 1759.77.

By Ironman at Political Calculations: Back in the days of the Soviet Union, there was a whole field within political science known as "Kremlinology," where people outside the ruling circle within the Kremlin would attempt to divine what was really going on in that nation from what little information the country's bosses made public in the media they controlled.

Ironman at Political Calculations submits: In the absence of new, noise-driven events, we can expect that the average of stock prices in the United States as measured by the S&P 500 will rise to a level between 1182 and 1218 in the very near future, with 1200 marking the midpoint of our forecast range (click charts to enlarge).